RBC Capital Markets

RBC Capital Advisor Brian Wudemann Has Suitability Customer Complaints

February 15, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Brian Wudemann (Wudemann), currently employed by RBC Capital Markets, LLC (RBC Capital) has been subject to at least seven customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Wudemann’s customer complaints alleges that Wudemann recommended unsuitable investments in various investments and misrepresented investment products including mutual fund securities and structured notes among other allegations of misconduct relating to the handling of their accounts.

In October 2020 a customer complained that Wudemann violated the securities laws by alleging that Wudemann made investments recommendations where the client was not made aware of the downside risk of a structured note he purchased. The claim alleges $51,522 in damages and settled for $14,000.

In August 2020 a customer complained that Wudemann violated the securities laws by alleging that Wudemann made investments recommendations from 2012 through 2018 that mispresented the nature of three mutual fund investments. The claim alleges $1,000,000 in damages and is currently pending.

In October 2018 a customer complained that Wudemann violated the securities laws by alleging that Wudemann misrepresented investments from June 2009 to July 2011. The claim alleges $44,179 in damages and an arbitration awarded $170,000 in damages.

Western International Advisor Stuart Godin Has Customer Complaints

February 20, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Stuart Godin (Godin), currently employed by Western International Securities, Inc. (Western International) has been subject to at least eight customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Godin’s customer complaints alleges that Godin recommended unsuitable investments in various investments such as promissory notes, managed commodities, and other investments among other allegations of misconduct relating to the handling of their accounts.

In May 2019 a customer complained that Godin violated the securities laws by alleging that Godin made misrepresentation and incompetence on stock selections from 2018 to 2019. The claim alleged $35,000 in damages and settled for $9,000.

In November 2017 a customer complained that Godin violated the securities laws by alleging that Godin caused losses due to the financial advisor’s unsuitable recommendation to invest in a managed futures fund from November 2012 through 2016. The claim alleged $50,000 in damages and settled for $20,000.

Westminster Financial Broker Peter Bittermann Subject to Regulatory Complaint

December 28, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Peter Bittermann (Bittermann), currently employed by Westminster Financial Securities, Inc. (Westminster Financial) has been subject to three customer complaints, one employment termination for cause, and one regulatory action. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Bittermann’s customer complaints allege that Bittermann made unsuitable recommendations.

In July 2018 the Wisconsin Division of Securities alleged that Bittermann was delinquent on certain taxes causing his registration to be revoked.

In February 2011 RBC Capital Markets Corporation, LLC (RBC) terminated Bittermann over allegations that he sold a security without prior verbal knowledge and consent by the client.

In August 2009 a client complained that Bittermann misrepresented the risks of an investment and it was unsuitable causing $1,619,634 in damages. The claim was settled for $750,000.

Financial Adviser Michael Jay Sharenow Subject to Multiple Client Disputes

June 27, 2017 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Michael Jay Sharenow (Sharenow). Sharenow’s FINRA BrokerCheck record shows several disclosures mainly pertaining to unsuitable investments.

In November 2016, a customer alleged that he or she instructed Sharenow to buy highly rated bonds but Sharenow instead bought two inappropriate securities. This dispute settled in November 2016 for the amount of $8,258.42.

A currently pending case against Sharenow was filed in October 2016 for allegedly over-concentrating a client’s portfolio during the period of 2012 to 2015 while he was employed at Wells Fargo Advisors. The clients claim that the alleged damages are greater than $810,000.00.

Broker Michael Hebner Subject to Multiple Customer Complaints Over Securities Practices

June 19, 2017 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints and a FINRA enforcement action with The Financial Industry Regulatory Authority’s (FINRA) against broker Michael Hebner (Hebner). According to BrokerCheck records, Hebner has been subject to five customer complaints and one employment termination for cause. The customer complaints against Hebner allege a number of securities law violations including that the broker made unsuitable investments and unauthorized trading among other claims.

Hebner was terminated in January 2015 by Wunderlich Securities, Inc. on allegations that Hebner failed to follow firm procedures regarding the approval and retention of correspondence. The most recent claim was filed in January 2017 alleging Hebner made unsuitable recommendations from 2010 until 2014. The customer claims that the activity caused $429,000 in damages. The claim is currently pending.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Broker Investigation: Customer Complaints Against Advisor Paul Blum

March 7, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Paul Blum (Blum). According to BrokerCheck records Blum has been the subject of at least eight customer complaints three of which have been filed since 2015. The customer complaints against Blum allege a number of securities law violations including that the broker made unsuitable investments, and excessive trading among other claims.

The most recent customer complaint filed in December 2015 and alleged negligence in recommending the purchase of bonds that defaulted from February 2009 until April 2014 claiming $450,000 in damages. The claim is still pending. In November 2015, another client filed a complaint alleging Blum invested in high yield bonds without consultation between May 2013 and May 2014 resulting in $133,000 in damages. The dispute is currently pending. In a third complaint filed in November 2015, an investor claimed that Blum invested in appropriate bonds from 2005 through 2015 causing $140,000 in damages. The claim was settled.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Customers File Claims Against RBC Capital Markets Broker Jeffrey Fladell

October 15, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Jeffrey Fladell (Fladell) has been the subject of at least 6 customer complaints, one regulatory action, and one criminal matter. Customers have filed complaints against Fladell alleging securities law violations including churning and excessive trading, unsuitable investments, negligence, and overconcentrated positions among other claims. Most of the claims against Fladell relate to allegations that the investor was concentrated in municipal bonds or other debt obligations that caused losses. For instance once complaint alleged damages of $1,000,000 as a result of concentration in municipal bonds that were inconsistent with the client’s objective of principal protection.

Fladell entered the securities industry in 1970. From March 1995, until October 2009, Fladell was associated with J.B. Hanauer & Co. Since October 2009, Fladell became associated with RBC Capital Markets, LLC out of the firm’s Parsippany, New Jersey office location.

All advisers have a fundamental responsibility to deal fairly with investors including making suitable investment recommendations. In order to make suitable recommendations the broker must have a reasonable basis for recommending the product or security based upon the broker’s investigation of the investments properties including its benefits, risks, tax consequences, and other relevant factors. In addition, the broker must also understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.

SEC Charged 36 Brokerage Firms Over Municipal Bond Offerings

August 12, 2015 | by Staff Attorney

The Securities and Exchange Commission (SEC) announced enforcement actions against 36 municipal bond underwriting brokerage firms for material misstatements and omissions in municipal bond offering documents. The SEC offered favorable settlement terms to municipal bond underwriters and issuers who self-reported securities law violations leading to the settlements.

The SEC alleged that between 2010 and 2014, 36 brokerage and financial firms violated federal securities laws by selling municipal bonds using offering documents that contained materially false statements or omissions about the bond issuers’ compliance with their obligation to disclosure. The firms were also alleged by the SEC to have failed to conduct adequate due diligence to identify the misstatements and omissions before offering and selling the bonds to their customers.

The municipal bond market is a $3.7 trillion market. Continuing disclosure provides municipal bond investors with information about the solvency and financial fitness of issuers on an ongoing basis. The SEC had previously identified issuers’ failure to comply with their continuing disclosure obligations as being a major challenge for investors seeking up to date information about their municipal bond holdings.

Cushing Mutual Funds Investor Update

August 4, 2015 | by Staff Attorney

The attorneys at Gana Weinstein LLP have been following the collapse of a series of mutual funds managed by Cushing Asset Management. The funds involved include:

Cushing Closed-End Funds

Cushing Renaissance Fund

FINRA Fines RBC $1.4 Million Over Unsuitable Reverse Convertibles

June 16, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) ordered RBC Capital Markets (RBC) to pay a $1 million fine and approximately $434,000 in restitution to customers for alleged supervisory failures resulting in sales of unsuitable reverse convertibles.

As a background, a reverse convertible is an interest-bearing note where repayment of the principal is tied to the performance of an underlying asset, such as a stock or basket of stocks. Investor risk of loss comes from changes in the value of the underlying asset. If the asset falls below a certain level at maturity or during the term of the reverse convertible the investor can suffer losses. In February 2010, FINRA issued a regulatory notice on reverse convertibles emphasizing the need for firms to perform a suitability analysis in connection with sales of reverse convertible because they are complex product.

FINRA and the SEC have both expressed alarm at the growing popularity of complex products. Complex securities include, but are not limited to equity-indexed annuities, leveraged and inverse-leveraged exchange traded funds, reverse convertibles, alternative mutual funds, exchange traded products, and structured notes. A 2012 SEC study on investor financial literacy found that retail investors, and particularly the elderly and minorities, lack basic financial literacy skills. Combining a general lack of financial literacy with an investment product landscape that increasingly focuses on ever more complex product offerings and investors are more reliant on their advisers than ever. Accordingly, retail investors do not always fully appreciate the risks involved with these.